IRS Urges Paycheck Checkup

The Internal Revenue Service has issued a statement urging two-income families and those who work multiple jobs to complete a “paycheck checkup” to verify you have enough tax withheld from your paychecks.

The passage of the Tax Cuts and Jobs Act, which will affect 2018 tax returns that you file in 2019, makes verifying that you have the correct withholding amounts even more important. These tax law changes include:

Increased standard deduction

Eliminated personal exemptions

Increased Child Tax Credit

Certain limited or discontinued itemized deductions

Changes in tax rates and brackets

If you need to adjust your paycheck withholding amount, doing so as soon as possible allows for more time for withholding to take place evenly throughout the year. Waiting means there are fewer pay periods to make the withholding changes – which could have a bigger effect on each paycheck, or potentially leave you under-withheld for 2018.

To use the Withholding Calculator, taxpayers should have their 2017 tax returns and most recent paystubs available.

Adjusting WithholdingIf you need to complete a new Form W-4, submit it to your employer as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances they claim must submit a new Form W-4 with the corrected withholding allowances to their employer within 10 days of the change.